Law: Income Tax Ordinance, 1979

Section: 50(10),50(4),136

(a) Income Tax Ordinance (XXX1 of 1979)--S. 50(10) & (4)---S.R.O. 368(I)/94 dated 7-5-1994---Notification S.R.O. 368(I)/94 dated 7-5-1994 although was validated and continued through S.50(10) of the Income Tax Ordinance, 1979, yet exemption granted to the Companies with paid-up capital below Rs.1.5 million was discontinued---Legislative history of S.50, Income Tax Ordinance, 1979 recorded. (b) Income Tax Ordinance (XXXI of 1979)--- ----S. 136---Appeal to High Court---Question proposed was neither raised nor considered or adjudged upon by the Appellate Tribunal---Question not arising from the order of the Tribunal did not deserve expression of opinion of the High Court. JUDGMENT MUHAMMAD SAIR ALI, J.---Through this judgment I.T.As. Nos. 196, 197 and 198 of 2000 are dealt with and decided together being between the same parties involving identical questions of law. 2. Alleging default of the statutory obligation to deduct tax at source under subsection (4) of section 50 of the repealed Income Tax Ordinance, 1979 by the appellant (i.e. a private limited company), the Deputy Commissioner of Income Tax served a show-cause notice. On failure to furnish a reply, the assessee appellant was declared to be an assessee in default under section 52 ibid and was consequently charged to the tax. The Commissioner of Income Tax (Appeals), Zone-III, Lahore accepting assessee's appeal through order, dated 26-11-1998 held the assessee not to be a "payer" to attract subsection (4) of section 50 ibid for the reason that the paid-up capital of the appellant was below Rs.1.5 million. 3. Upon the departmental appeal, the learned Income Tax Appellate Tribunal, Lahore on 18-12-1999 reversed the order of the Commissioner of Income Tax and restored that of the Deputy Commissioner of Income Tax by observing that: "(5) Notification No. S.R.O. 368(I)/94, dated March 7, 1994 exempted Companies vide its Clause (1) whose paid-up capital is below Rs.1.5 (M) from deduction of tax under section 50(4) as payers. This notification has not been protected by subsection (10) of section 50 of the Income Tax Ordinance if read with the proviso (ii) to subsection (4) of section 50. Thus the contention…

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